Correlation Between Valic Company and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Valic Company and Icon Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Valic Company and Icon Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valic Company I and Icon Financial Fund, you can compare the effects of market volatilities on Valic Company and Icon Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Valic Company with a short position of Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Icon Financial.
Diversification Opportunities for Valic Company and Icon Financial
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Valic and Icon is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial and Valic Company is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Valic Company I are associated (or correlated) with Icon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Financial has no effect on the direction of Valic Company i.e., Valic Company and Icon Financial go up and down completely randomly.
Pair Corralation between Valic Company and Icon Financial
Assuming the 90 days horizon Valic Company I is expected to generate 0.4 times more return on investment than Icon Financial. However, Valic Company I is 2.49 times less risky than Icon Financial. It trades about 0.1 of its potential returns per unit of risk. Icon Financial Fund is currently generating about -0.03 per unit of risk. If you would invest 1,064 in Valic Company I on September 3, 2024 and sell it today you would earn a total of 89.00 from holding Valic Company I or generate 8.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valic Company I vs. Icon Financial Fund
Performance |
| Timeline |
| Valic Company I |
| Icon Financial |
Valic Company and Icon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valic Company and Icon Financial
The main advantage of trading using opposite Valic Company and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Icon Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Icon Financial will offset losses from the drop in Icon Financial's long position.| Valic Company vs. Old Westbury Large | Valic Company vs. William Blair Large | Valic Company vs. Rbb Fund | Valic Company vs. Semiconductor Ultrasector Profund |
| Icon Financial vs. Vanguard Financials Index | Icon Financial vs. Regional Bank Fund | Icon Financial vs. T Rowe Price | Icon Financial vs. Financial Industries Fund |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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